Fitch says Czech banking sector remains sound, keeps stable outlook.

By bne IntelliNews December 21, 2012
Rating agency Fitch has kept stable the outlook on the Czech banking system reflecting the sectors strong asset quality, funding and performance but future performance will be constrained by weak loan growth. In a new report on CEE banks, Fitch said despite large dividend pay-outs, the capital adequacy ratio of the Czech banking sector improved to 16.4% at end-Q3 2012 from 15.3% at end-2011 providing a comfortable buffer against significant stresses. The sectors liquidity is ample with the loans-to-deposits ratio at a healthy 76% at end-Q3. Czech banks boosted their combined profit by an annual 23% thanks partly to lower provision costs. The major drag on future performance will be weakening loan growth, which will continue to be curbed by the governments austerity measures and weak economy, Fitch said. The rating agency expects Czech economy to contract by 0.9% in 2012 and expand by 1% in 2013. Fitch said the overall outlook for banks in central and eastern Europe is stable but remains bleak against the backdrop of the eurozone crisis, resulting in weaker GDP and deteriorating asset quality. Credit expansion in the region will stay weak due to sluggish demand and limited attractive lending opportunities as a result of the slow recovery in the eurozone. Most CEE banks will worsen their asset quality due to rising impairment charges, Fitch said.

Related Articles

Czech CSSD proposes 2014 general and European elections to be held together.

Social Democrats (CDDS), the major Czech opposition party, proposed next year's general and European elections to be held on the same day, CTK news agency reported. CSSD leader Bohuslav Sobotka ... more

Tesco Czech faces fine for selling products containing undeclared horsemeat

The Czech unit of UK retailer Tesco faces a fine of up to CZK 3mn (EUR 116,000) for selling beef lasagne containing undeclared horsemeat, Radio Prague reported. The state-run Agricultural and Food ... more

Czech Senate votes to limit immunity of lawmakers, judges.

The upper house of the Czech parliament, the Senate, voted on March 20 a constitutional amendment to limit the immunity of lawmakers and constitutional judges, Radio Prague reported. Out of the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss